Half of Vancouver Olympic Village social housing may go to market-rate rentals

By Jeff Lee, Vancouver Sun April 20, 2010

Photograph by: Ian Lindsay, Vancouver Sun

The City of Vancouver unveiled a plan Tuesday that would see taxpayers shell out an additional $32 million for affordable housing at the Olympic village and encourage key public service workers to rent there.

The city said it would stick to its original plans for affordable housing at the site, splitting it between low-income and those able to pay market-rate rents.

According to a staff report released Tuesday and endorsed by Mayor Gregor Robertson, the city would encourage police officers, firefighters, nurses and other public service employees to move into the market-rate units, which would cost $1,600 to $2,400 per month.

Those rents, along with the new $32-million subsidy from city coffers, would pay for the low-income units.

Many details of the proposal, which goes to city council for a decision Thursday, have not yet been worked out, including how people would be chosen for the market-rate units.

The plan arose as the city struggled to meet its promise to build 252 units of affordable housing in the Olympic village in the wake of massive cost increases as the project was being built.

Without the proposal, the city wouldn't have been able to stick to its promise of providing 20 per cent affordable housing in the 1,108-unit neighbourhood.

The city even considered selling the units at market rates and using the money to build social housing elsewhere.

Housing activists charged the plan is a betrayal of a promise to the International Olympic Committee that all of the units would be used for "non-market housing."

Laura Stannard, a spokeswoman for Citywide Affordable Housing, said allowing half the units to be rented at full market rental rates of up to $2,398 per month doesn't constitute affordable housing.

She expected that all 252 units would go to housing people who have no prospect of paying market rents.

"The definition of non-market housing is that it requires a subsidy. If you are renting out units at market rates, that's not a subsidy and that isn't non-market," she said.

Robertson, however, said the city has always endorsed a mixed-income program for affordable housing across the city and that it had never considered devoting all the units to "core need" housing for the poor.

That view was backed up by city staff who said council policies dictate that affordable housing units are to be a mixture of market rental, low-income and core-need housing with rents at below market rates.

Robertson also said a staff recommendation to give the market-rate rentals to police, fire and health and local employees is "intriguing." He said many are forced to live outside the city because they can't find affordable housing.

Some councillors said they wanted more social housing.

Councillor Ellen Woodsworth said she always believed all of the units should be used for housing the needy. "We are in the midst of the worst homelessness crisis in the city's history and we should be using these units to help solve that," she said.

But Councillor Kerry Jang said he supports the idea of targeting the higher-end units toward public safety employees.

Recent figures suggest just 10 per cent of the city's firefighters and police can afford to live within city boundaries. By offering them preferred rental housing, more will be available in the case of disaster response, he said.

The social housing units are part of the financially troubled Millennium Water development on the south shore of False Creek, of which the vast majority are strata-title condominiums. A total of 737 are private for-sale units. Millennium is also providing 129 rental units, although these are separate from the city's proposed 126 market rent apartments.

The city is also the financial backer of the Millennium project and is owed about $969 million. It expects to get that money back, with interest, as Millennium sells its condominiums for a profit.

The entire project was hit by a combination of problems, including a hot construction market, an expedited time frame for the Olympics and the worldwide economic collapse in 2008.

The proposal going to council suggests taking $32.1 million from various city sources to help bridge a $78-million gap between the $110-million cost of the affordable housing program and the $32-million it has in hand from the Vancouver Organizing Committee and special levies.

The additional funds would allow the city to take out a $45.9-million mortgage, which would be paid down through the market-rate rents.

The city hopes to negotiate a funding agreement with the B.C. Housing Ministry for the low-income renters.

Council will debate the proposal on Thursday.

In a report issued at a background briefing Tuesday, staff said they are recommending the option that would see market rental rates of between $1,601 for a one-bedroom unit and $2,368 for a four-bedroom unit per month. At the other end of the spectrum, core-needy rents would be $612 to $962 per month. The market rents would be structured to cover a $45.9 million mortgage.

The proposed deal is similar to other mixed-income housing initiatives the city has elsewhere, including the south side of False Creek between the Cambie and Granville bridges.

The city says the cash injection in the city's equity in the social housing component would be taken from a number of existing city sources, including just under half from savings found in current and future capital plan budgets.

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Average price of Metro Vancouver home now almost $663,000, above pre-recession levels

By Derrick Penner, Vancouver Sun April 1, 2010

Metro Vancouver's cheap-mortgage-fuelled real estate market has overshot its previous peak for prices with indications it will keep going, albeit more slowly, before cooling with the rise in interest rates.

February saw the average property price hit $662,741 in the area of Metro Vancouver within the Real Estate Board of Greater Vancouver. (The board does not cover Surrey, Langley or White Rock.)

That is well above the previous $624,639 peak price, which the region saw in May 2008.

Now, the Teranet-National Bank housing price index, a more complicated measure of property prices that analyses data from the repeat sales of homes, also indicates that all the deflation of home prices that occurred during the recession had been regained by January, and will keep going, but more slowly.

The Teranet-National Bank index, which runs a couple of months behind the reports of real estate boards, found January was the ninth month in a row that the national price index increased, though it did so by the smallest margin in the past nine months.

"Even in Vancouver, we've gained back everything we lost," Simon Cote, an analyst at the National Bank of Canada said in an interview. "The pace might be slowing a bit, but they are still going up."

Metro Vancouver prices, on the Teranet-National Bank index, reached their recession trough in May 2009, but rose 11.7 per cent between May and January.

Metro Vancouver prices rose .9 per cent between December and January, the biggest gain among the six major markets included in the Teranet-National Bank index.

National Bank analyst Marc Pinsonneault, in a note to clients, said the January price increases can still be considered "vigorous, especially in Vancouver and Toronto," but that developments in most markets back up National Bank's view that increases will slow down.

Pinsonneault said that after eight months of briskly rising prices, Metro Vancouver's market has "shifted from a favourable-to-sellers market to a balanced market."

Cote added the bank is "expecting that the increase in supply, both of new construction and more homes coming to the [resale] market, will bring the market back into equilibrium."

Mortgage rates will also be a factor. Canada's major banks raised their posted rates on five-year fixed mortgages .6 of a percentage point on Monday and Tuesday to 5.85 per cent, which will squeeze some buyers out of the market, according to Cameron Muir, chief economist for the B.C. Real Estate Board.

"What it means for purchasers is that it erodes their purchasing power" by reducing the size of mortgages buyers are capable of carrying, he said.

For a family with a household income of $70,000, Muir said, this week's bump in five-year rates for buyers seeking five-year terms reduces the final amount they can pay for a home by $35,000.

Please excuse the mess while I upgrade my website. In the meantime, you may access all my blog posts by clicking here.

Please excuse the mess while I upgrade my website to provide you with even more timely and topical information on our market and the process of buying and selling. In the meantime, you can access my blog by clicking here